December 24, 2005

Pensions:NY Transit Strikers Show Value Of Unions

Labor reporter Steven Greenhouse has an article in the NY Times today about the nation-wide battles that workers are fighting (and generally losing) to preserve their promised pension benefits. The MTA's attempt to raise the pension contributions of new New York transit workers was a major cause of the recently ended strike.

Many officials and fiscal experts assert that across the nation government pension plans face a shortfall of hundreds of billions of dollars. From New Jersey to California, government officials say that attempts - either through contract fights, legislation or public referendums - to limit the amount of money that states and cities contribute to pensions are inevitable and overdue. Labor unions, for their part, say that the worries are overblown.

"Every level of government in New York City, New York State and in states across the country face large and growing pension obligations," said E. J. McMahon, a budget expert at the Manhattan Institute, a conservative research group. "If nothing is done to bring pensions under control, all the other headaches that state governments will be facing in the next 20 years on needs like education and health will be enormously worse."

You hear a lot of that, but as Greenhouse points out, that's not the only story:

Many government employees and their unions assert that the campaign to trim pensions threatens America's social contract for the middle class: a respectable pension.

Saying that in recent contracts they had sacrificed wage increases or better health benefits for solid pensions, many public employees and their unions assert that governments are betraying their commitments by seeking to now cut pensions. Further, they argue that much of the shortfall in pension financing could be erased by a strong stock market in the next several years.

"A lot of people are exaggerating the size of the problem," said Gerald McEntee of the American Federation of State, County and Municipal Employees, which represents 1.4 million government workers. "Right-wing think tanks and conservative Republicans want to do away with traditional pension plans and replace them with much-cheaper 401(k)'s at the same time they want to give all these tax cuts to the rich."

Now, over the past week I've been communicating about the strike and expressing my extreme disappointment with those who think that the "greedy" transit workers should be happy to give up benefits because they're already much better off than many other workers.

NY Mayor Michael Bloomberg exploited that sentiment during the strike:

Mayor Bloomberg repeatedly called the strikers greedy. "The public says, 'I
don't want to pay more taxes and I don't get these kind of benefits,' " he said
yesterday. "You have no idea how many e-mails I got, 'I don't make that kind of
money. I don't have those kinds of pension benefits. Why are people striking?' "

But read further. Greenhouse goes on to analyze the reasons that some workers are better off than others:

Nationwide, 90 percent of public-sector workers have traditional benefit plans - known as defined-benefit plans because retirees receive a defined amount each month- while just 20 percent of private-sector workers do. In 1960, 40 percent of private-sector workers were in traditional pension plans. One reason for the disparity: 36.4 percent of government employees belong to unions while just 7.9 percent of private-sector workers do.

No Union=Defined contribution pensions (where you contribute a defined amount, but what you get back depends on how your investments behave):bad.

Now, there are two possible conclusions to these equations:

Damn unions are greedy. They're ruining America. Why should those transit workers have a right to better pay and benefits than I have? (And why, or why do they have a right to inconvenience me to keep those outrageous benefits?) They should face reality and be satisified with what I and everyone else I know has submitted to.

OR

Hmm, looks like belonging to a union means better pay and benefits. Maybe I should organize a union that would help me fight for better pay and benefits.

As I've written before, in a race to the bottom, there's no finish line. Who's to say, following Option No. 1 to its logical conclusion, that someone else doesn't come along a bit later and say Unreliable pensions with high employee contributions? Look at all the workers in this country that don't have any pensions. How dare you protest when I take the entire pension away, you greedy bastards!"

Health and safety protections? Look at the workers in Mexico and China who are dying by the thousands. How dare you object to abolishing OSHA!

But looking back at history, is that the way human progress has been made? What if people who were working 60 hour weeks with lousy pay, and no vacation days or holidays or sick days or health and safety protections had said, "Gosh, look around, there are people even worse off than I am, making even less money and working even more hours. Maybe I should just be happy with my lot in life, put my head down and get back to work."

That logic would undoubtedly make perfect sense to billionaire Mayor Michael Bloomberg. Luckily for all of us, that's not the way that workers thought throughout history. Those who advocate that mindset today are basically in favor of reversing the course of human progress.